Does Protection Pay?

Based on a common myth, the idea exists that a person can pay for a protection policy for years and at the point you make a claim the protection provider wriggles out of paying. Like all good myths, this notion is not support by concrete evidence and is fostered by the fear of wasting money and trusting in something that does not come good. What is concrete are the official industry figures that offer reassurance over numbers of claims and amounts of money paid out by protection providers every year. And these come in the form of annual claim reports that providers encourage us to share with our clients to highlight the importance they place on supporting policy holders by paying out when they need it most. 

Scottish Widows has recently released their 2024 claim report reflecting, what we see is the case with most providers, that protection policies do pay out to customers and their families. The report shares some sizeable statistics that show the scale of claims and the amounts they pay out: 

The most myth-busting statistic has to be the report of 98% of Scottish Widows claims receiving a pay out. This certainly challenges the fear-mongering assumptions and offers some reassurance that when we insurance our lives and our income, and pay our premium month on month, that the financial safety of a policy is highly likely to support us and/or our family at a crucial time. 

Delving into the Scottish Widows report a little further, some of the finer statistics can help to dissipate other myths about the age a person should be when they have a protection policy: the youngest claim on life cover in 2024 was 21 years old, and 57% of all claims were made by people between the age of 20-60 years old. This paints a very broad picture about the relevant age for protecting our lives and gaining security for our loved ones - interesting. 

To learn that the average length of time a policy was held for before a claim in 2024 was 11 years could be a surprise to most. When we arrange critical illness cover for our clients the hope is always that their will never be a need to claim and it will become their greatest way to “waste money”. Therefore, to learn that an provider’s average statistic indicates that a claim may come in just over a decade after the policy starts offers some perspective on the way protection is assurance against untimely events. 

Protection providers focus upon the claims they make as they want to highlight the importance the place on supporting customers and loved ones and offering what Scottish Widows’ Protection Director calls a ‘financial safety net’. The safety net of a policy can also include the provider’s partners, like that of Macmillan, enabling the customers to focus on what really matters during life’s unexpected events. 

 

Scottish Widows is one of many providers available to HomeLife as we focus on the most suitable product and provider that can offer your protection safety net. 

Risk warning: Your home may be repossessed if you do not keep up repayments on your mortgage.